Another firm practices market segmentation (or third degree) price discrimination. In market segment A, demand is...
Another firm practices market segmentation (or third degree) price discrimination. In market segment A, demand is price elastic; in market segment B, demand is price inelastic. In which segment will the firm charge the higher price?
Homework Answers
Firm will charge the higher price in market segment B.
Higher price will be charged in market where demand is more inelastic and lower price will be charge in market where demand in more elastic.
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Another firm practices market segmentation (or third degree)
price discrimination. In market segment A, demand is...
QUESTION 5: THIRD DEGREE PRICE DISCRIMINATION (20pt) A monopolist engages in third degree price discrimination.There are...
QUESTION 5: THIRD DEGREE PRICE DISCRIMINATION (20pt) A monopolist engages in third degree price discrimination.There are 2 types of consumers, and the monopolist wants to sell to both groups. The monopolist is allowed to charge different prices and hence engages in third degree price discrimination. The demand curve for each group (the entire group) is as follows 01 500 10P Q2 200-5P2 The total cost function is TC 2000+10Q (a) What price does this firm charge to each group? (b)...
3. A monopolist is able to practice third-degree price discrimination between two markets. The demand function...
3. A monopolist is able to practice third-degree price discrimination between two markets. The demand function in the first market is q = 500 - 2p and the demand function in the second market is q = 1,500 - 6p. To maximize his profits assuming constant marginal cost, he should a. charge a higher price in the second market than in the first. b. charge a higher price in the first market than in the second. c. charge the same...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under 65 and senior citizens. The monopolist's marginal oost is MC = 0.05q, where q is the total output in both markets. The marginal cost does not depend on the market in which the goods are sold. The demand curves are Adults: PA-25-1/6 x QA-25-0.1667 x QA Seniors: PS = 15-⅛xQs-15-0.125 x Qs ● . A. What is the total industry demand curve? (Rewrite each...
Question 2 (35 points): (3rd Degree Price Discrimination) Let there be a monopolist firm and two ...
Please answer clearly and explain.
Question 2 (35 points): (3rd Degree Price Discrimination) Let there be a monopolist firm and two groups of consumers. Suppose that marginal cost is defined by MC- 2. T'he demand that each consumer receives is given by Q,-50-pl 202 200-P 1) ( 4 points) Consider the monopolist engages in first degree price discrimina- tion only in market 2. Compute the monopoly profit in this market. ii) (4 points) Which group has a mhore inelastic demand...
Question 2 (35 points): (3rd Degree Price Discrimination) Let there be a monopolist firm and two ...
Please answer clearly and explain. Thank you!
Question 2 (35 points): (3rd Degree Price Discrimination) Let there be a monopolist firm and two groups of consumers. Suppose that marginal cost is defined by MC- 2. The demand that each consumer receives is given by 1 50- P 2Q2- 200 - P2 i) (4 points) Consider the monopolist engages in first degree price discrimina- tion only in market 2. Compute the monopoly profit in this market. ii) (4 points) Which group...
1. Which of the following correctly summarizes the strategy used by firms that employ third-degree price...
1. Which of the following correctly summarizes the strategy used by firms that employ third-degree price discrimination? Group of answer choices a.The firm’s marginal revenue will be lower in the market with the more elastic demand. b.The firm sets the price higher in the market with the more elastic demand. c.The firm sets the price lower in the market with the more inelastic demand. d.The firm’s marginal revenue will be higher in the market with the more elastic demand. e.None...
The (inverse) demand curve for the segment of the market with strong demand is P = 200 - 2Q. The ...
The (inverse) demand curve for the segment of the market with strong demand is P = 200 - 2Q. The demand curve for the segment of the market with weaker demand is 150 - 2Q. Using second degree price discrimination, what price would you charge the segment of the market with strong demand?
Consider a monopolist who price discriminates using third-degree (direct) price discrimination across two markets, A and...
Consider a monopolist who price discriminates using third-degree (direct) price discrimination across two markets, A and B. If the elasticity of demand is -1.5 in market A and -2.3 in market B, then A. the optimal price in market A should be lower than the optimal price in market B. B. the optimal price in market A should be higher than the optimal price in market B. C. the optimal price should be the same in market A and in...
1 pts Question 21 Which of the following is an example of third degree price discrimination?...
1 pts Question 21 Which of the following is an example of third degree price discrimination? None of these are third degree price discrimination A baseball stadium offers discounts to senior citizens A cable provider offers a package so customers can get cable and high-speed internet with a single subscription A car salesman can charge each customer exactly what he or she is willing to pay for the cars at his dealership 1 pts Question 22 Which of the following...
d segment of the labor supply of a ployer is downward sloping, then segment, the income...
d segment of the labor supply of a ployer is downward sloping, then segment, the income effect dominates the substitution effect. b) For that segment, the substation effect dominates the income effect a) For that is no wage that equilibrates the market because the labor demand is also downward sloping. d) The labor supply for that player is completely elastic. 1.7 When a firm charges different prices for the same good in different segments of the market (i.e. for different...
QUESTION 5: THIRD DEGREE PRICE DISCRIMINATION (20pt) A monopolist engages in third degree price discrimination.There are 2 types of consumers, and the monopolist wants to sell to both groups. The monopolist is allowed to charge different prices and hence engages in third degree price discrimination. The demand curve for each group (the entire group) is as follows 01 500 10P Q2 200-5P2 The total cost function is TC 2000+10Q (a) What price does this firm charge to each group? (b)...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under 65 and senior citizens. The monopolist's marginal oost is MC = 0.05q, where q is the total output in both markets. The marginal cost does not depend on the market in which the goods are sold. The demand curves are Adults: PA-25-1/6 x QA-25-0.1667 x QA Seniors: PS = 15-⅛xQs-15-0.125 x Qs ● . A. What is the total industry demand curve? (Rewrite each...
Please answer clearly and explain.
Question 2 (35 points): (3rd Degree Price Discrimination) Let there be a monopolist firm and two groups of consumers. Suppose that marginal cost is defined by MC- 2. T'he demand that each consumer receives is given by Q,-50-pl 202 200-P 1) ( 4 points) Consider the monopolist engages in first degree price discrimina- tion only in market 2. Compute the monopoly profit in this market. ii) (4 points) Which group has a mhore inelastic demand...
Please answer clearly and explain. Thank you!
Question 2 (35 points): (3rd Degree Price Discrimination) Let there be a monopolist firm and two groups of consumers. Suppose that marginal cost is defined by MC- 2. The demand that each consumer receives is given by 1 50- P 2Q2- 200 - P2 i) (4 points) Consider the monopolist engages in first degree price discrimina- tion only in market 2. Compute the monopoly profit in this market. ii) (4 points) Which group...
Consider a monopolist who price discriminates using third-degree (direct) price discrimination across two markets, A and B. If the elasticity of demand is -1.5 in market A and -2.3 in market B, then A. the optimal price in market A should be lower than the optimal price in market B. B. the optimal price in market A should be higher than the optimal price in market B. C. the optimal price should be the same in market A and in...
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d segment of the labor supply of a ployer is downward sloping, then segment, the income effect dominates the substitution effect. b) For that segment, the substation effect dominates the income effect a) For that is no wage that equilibrates the market because the labor demand is also downward sloping. d) The labor supply for that player is completely elastic. 1.7 When a firm charges different prices for the same good in different segments of the market (i.e. for different...
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